John Lewis customers set for a payout as regulator condemns sky-high charges on HSBC-run credit card

Fine: John Lewis customers were subjected to sky-high charges after falling into debt

Some John Lewis customers who got in to debt are preparing for a pay-out after being subjected to sky-high charges.

The store's credit card, and loans from HFC Bank, both run by HSBC, imposed fees of up to 16.4 per cent on customers who were contacted by debt collectors.

HSBC has agreed to stump up £4million to pay back customers subjected to these 'unreasonable' practices.

The Financial Conduct Authority said that the bank has voluntarily agreed to set up a redress scheme for customers who were left out of pocket after paying unreasonable debt collection charges imposed by HFC Bank Ltd and John Lewis Financial Services Limited.

The regulator said that between 2003 and 2009, customers of HFC and JLFS who fell into arrears were referred to the firms' nominated solicitors.

However, on referral, the solicitors added 16.4 per cent of the balance to the account as a 'debt collection charge'.